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IPO - What is the difference between Fixed Price Issue and Book Built Issue?
An issuer company is allowed to freely price the issue.The
basis ofissue Price is to be disclosed in the offer doc-ument where the issuer
discloses in detail about the quali-tative and quantitative factors justifying
the issue price.There is only one price and issue will be offered at thatprice.
Such type ofissue is known as Fixed Price Issue.
"Book Building" means a process undertaken by which
ademand for the securities proposed to be issued by a bodycorporate is elicited
and built up and the price for the secu-rities is assessed on the basis ofthe
bids obtained for thequantum ofsecurities offered for subscription by theissuer.
This method provides an opportunity to the marketto discover price for
securities. Individuals who apply forthe IPO put their bid
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